Mr Kenneth Baker, the minister for local government, yesterday refused an application from the Greater London Council for his consent to a £143,000 grant to the London Lesbian and Gay Centre.

Under new powers in the paving bill to abolish the GLC, Mr Baker has the power to veto grants of over £100,000. He said that his refusal was based on the fact that there was no evidence that the lesbian and gay community constituted an economically deprived group of the population.

LGBT London: what venue closures mean for the capital's future

Read more

He said he had not judged whether the centre was justifiable, nor whether the intended users of the social centre constituted a group of the population who suffered social discrimination. He did question whether the centre would be able to raise an anticipated income of £90,865 a year.

Conservative politician Kenneth Baker with Prime Minister Margaret Thatcher at the party conference in Blackpool in 1986. Photograph: Keystone/Getty Images

Miss Valerie Wise, the chairman of the GLC’s women’s committee, said that if the users of facilities like the gay centre now had to prove they were economically deprived hundreds of voluntary organisations would be denied grant assistance.

‘He is wrecking a £1 million project, 11 full-time jobs, and the efforts of hundreds of volunteers,’ said Miss Wise, who opened the centre in Cowcross Street, Smithfield, three weeks ago.

Staff at the centre reacted to the decision with dismay. Mr Spike Aldridge, information officer, said: ‘All this investment may be completely wasted by this thoughtlessness.’